Two of Hollywood’s biggest businessmen are teaming up to help make homeownership more accessible to renters.
According to Bloomberg, the startup, Landis Technologies, buys a home for someone who is looking to own but can’t yet and rents it to them until they qualify for a mortgage. From there, the client can buy the home back at a preset price up to two years after the firm first bought it.
Will Smith’s Dreamers VC and Jay-Z’s Roc Nation, along with Sequoia Capital put in a reported $165 million into the firm.
“Financial inclusion is really important to us,” Landis co-founder Cyril Berdugo told Bloomberg. “An aspect of Landis that we’re very proud to be a part of is wealth creation for low income Americans,” Berdugo added.
The company currently operates in 11 states including Alabama, Kentucky, and South Carolina. Their business model has been used by other firms like Home Partners of America, which was recently acquired for $6 billion.
With the $165 million investment, Landis will buy approximately 1,000 homes and hopes to turn at least 80% of their clients into homeowners.
“We make money when the client buys the house back,” Berdugo explained. “If we leave money on the table, that’s our problem.”
Landis clients can be offered more time to buy a home back if they aren’t ready to purchase the home in two years. The firm also charges an additional fee at the time of its initial purchase and sets rent at a rate parallel to the carrying costs of the home.